How Rising Interest Rates will affect the Spring Housing Market.
Well, there are a couple of things we have to look at before we dive into the future… 1). Over the past 2 years there has been an increase in residential home prices of approximately 40% (yes, that is a crazy number!). I calculated this by using my normal testing area in Lancaster of Ave. K to Ave. J and 20th St. W. to 40th St W (2 square miles). There were approximately 30 homes sold in each of the 2 sample sets. I compared the time frame of Dec. 1st of 2019 to Jan 31 of 2020 …to… Dec. 1st, 2021, to Jan 31st 2022. Other markets may not be this high, but I’ll bet they’re close. 2). A year ago, mortgage rates were around 2.75%. Today, they are about 3.50%. This adds up to a higher monthly payment if we were to compare the exact same sales price year over year. That being said, The Federal Reserve stated they will likely raise rates 2 -3 more times this year.
Here’s my prediction, I think we are still looking at a busy 2022 Spring Housing Market. This is (mainly) because there will be buyers trying to get in (buy their home) before the rates climb another half a percent.
I don’t see home prices going up another 20%, but I do think they will be up between 5%-10% this year….. because we still don’t have enough housing inventory, i.e. There are more buyers than sellers. Supply and demand will dictate the market.
Every market is different. We do our homework in every market that we are in to ensure that are clients are well informed. If you have any questions regarding this or any other real estate related matter, feel free to contact me at (661) 406‑1562 or (661) 400‑0705 or email us at [email protected].
Also, if you know of anyone interested in getting into real estate, check out or school at avreschool.com and feel free to contact us to see how we can reimburse you when you join The Hier Advantage Real Estate Sales and Service.
Take care, be safe out there and have a GREAT DAY!
Sincerely
Ron Hier and Team
